To succeed in today's turbulent business environment, enterprises must drive deeper customer engagement, connecting empowered customers to the valuable services they want across multiple touchpoints. This crucial shift to an outside-in focus, however, brings new demands and challenges to the application development and delivery organization. On June 13, 2011, Forrester convened a group of expert analysts to discuss:

How application delivery should partner with marketing to drive deeper customer engagement through the entire life cycle across multiple touchpoints.

Best practices for application development to design and deliver improved customer experiences.

How to reconcile the need for stronger design with agile processes and continuous delivery.

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Oh, look what came in the mail yesterday: The order I tried desperately to cancel last week. But, no, UPS dropped it off, and the packing slip said nicely, “Thank you for your order! We are committed to ensure [sic] your experience exceeds your expectations.” Well, you failed.

Let me start from the beginning.

You see, I’m working on reviews for the latest “Best And Worst Of Website User Experience” report (check out last year’s report if you’re curious), and this year we’re evaluating the user experience at the top four tablet manufacturers’ sites. Instead of actually ordering brand new tablets, we are substituting an inexpensive accessory, completing the checkout process, and then immediately canceling the order so that nothing ships and no cards get charged. All went fine in canceling three of the orders, but the fourth, from a company that shall remain nameless, proved more difficult.

Here are all the steps I took to try to cancel the order:

I tried chat. I went to the “Help” page on the site and found listed in the contact info section a link to chat and a phone number. I initiated the chat and reached an agent, but the conversation was very slow (about 20 lines of communication in 15 minutes), the rep was hard to understand, and she couldn’t help me. She told me to call 1-800-[company].

I tried the website itself. I could check order status very easily on the site, but the info just told me the status (“In process”) and provided no contact information in context for order questions.

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Several recent Forrester reports home in on what we call “The Age Of The Customer” in which firms must seek to become customer-obsessed to build differentiation and loyalty. Those firms that embrace this will ramp up investment in four priority areas: 1) real-time customer intelligence; 2) customer experience and customer service; 3) sales channels that deliver customer intelligence; and 4) useful content and interactive marketing. All these needs are technology-infused – wholly dependent on technology and in categories where technology is evolving rapidly. Underlying these investments is the need to master the flow of data about customers: capturing/collecting data about them, analyzing it, distributing to those points of engagement, and, finally, integrating the insights into the customer experience.

Companies can’t succeed at doing this without a close partnership between the business areas leading the charge and IT. The rate of change of your customers, markets, business opportunities, and technology is simply too fast. Forrester is exploring this theme in our first CIO/CMO joint forum.

The reality, though, is companies flounder at this marketing-IT partnership. They flounder because of:

More ideas than capacity. A plethora of desired initiatives are constantly being surfaced – beyond the limits of available budget and with no mechanism to sort them into an achievable plan that IT can deliver on.

Customer experience is becoming the new currency of business success. If you make quality of experience the centerpiece of your customer relationship management (CRM) strategy, you will be creating a sustainable business asset of substantial value.

Customer experience has qualitative and quantitative returns, as I will discuss next month at Forrester’s Business Process (BP) Forum. For a detailed discussion of customer experience optimization, also take a look at this recent Forrester report that I authored. You can measure the qualitative business return on customer experience in, dare I say it, love. Hopefully, your customers love the multichannel experience you provide, and, as a consequence, seek to deepen and extend the relationship. The concomitant of that is the quantitative return, summed up by a single word: money. If you’re making customers happy, hopefully that translates into sales, profits, renewals, referrals, and other bottom-line boosts.

That’s all well and good, but how can you directly translate love — i.e., quality of experience — into money, measure the impact, and calculate the return on your investment in experience-boosting technologies?

CRM next best action platforms are the key to realizing this promise. CRM next best action environments shape experience through embedded analytics that guide all interactions and offers across all customer-facing channels, processes, and roles. In addition to predictive analytics and business rules management systems, enterprises often incorporate into their next best action initiatives such experience-boosting investments in decision automation, sentiment analysis, conversation management, dynamic case management, knowledge management, and social networking.

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Consider the following scenario: It’s a hot summer day and a prospective customer walks into your store to buy an air conditioner. He evaluates several models and then buys one — but not from you. It turns out your competitor located two miles away is offering the same model at a 20% discount. How did he know this? He scanned the product's bar code using the RedLaser app on his iPhone, which displayed several local retailers with lower prices than yours. If he had been willing to wait three days for shipping, he could have purchased the exact same model while standing in your store from an online retailer at a 30% discount.

This type of technology-fueled disruption is affecting all industries, not just retailers. Since the early 1900s, businesses relied on competitive barriers such as manufacturing strength, distribution power, and information mastery. But this is all changing in the age of the customer, where empowered buyers have information at their fingertips to check a price, read a product review, or ask for advice from a friend right from the screen of their smartphone.

To compete in the age of the customer, your business must become customer-obsessed. As Forrester’s Josh Bernoff (@jbernoff), SVP of Idea Development and author of Groundswelland Empowered, advocates in his latest research: “The only source of competitive advantage is the one that can survive technology-fueled disruption — an obsession with understanding, delighting, connecting with, and serving customers.”